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The Tax Publishers2009 TaxPub(DT) 2048 (Jod-Trib) : (2009) 126 TTJ 0217 : (2009) 030 DTR 0561 V.B. Giri v. Asstt CIT INCOME TAX ACT, 1961 Search and seizure- Block assessment-Proceedings under section 158BD-Jurisdiction Search under section 132(1) was conducted at the residence of one person. During the course of search, copy of two bank accounts assessee, storekeeper company were found and seized. Assessee had maintained accounts with two banks but deposits made in these accounts were not proportionate with the source of his income. In post-search inquiries, he admitted that the deposits in the said bank accounts belong to his friend whose whereabouts are not known. Inquiries were also made to trace the source of deposits as to whether same relate to sale proceeds of the company in which assessee was employed. But he denied that there was any nexus between the deposits and the sales of the company in which he was employed. *Held:When considered the mandatory provisions as contained under section 158BD and as clarified by Honble apex court in the case of Manish Maheshwari v. Asstt CIT & Anr. (2007)289 ITR 341 (SC), it was explicitly cleared that before proceeding against any person other than the searched person under section 158BD, the law required that a satisfaction to the effect that the documents found as a result of search gave rise to undisclosed income of any other person other than the searched person, was required to be reached in the case of a person searched under section 132. In this case in, no such satisfaction was found reached or recorded in the case of searched person. Even a notice under section 158BC which is also a condition essential for proceeding against such person had also not been met out though condition of handing over of the seized documents could be deemed to have been satisfied as AO of both the persons was same. As the preconditions of invoking jurisdiction under section 158BD as laid down by the apex court in the case of Manish Maheshwari v. Asstt CIT & Anr. (supra), were not satisfied, the notice so issued under section 158BD on the strength of which assessment of undisclosed income of assessee had been made, was hereby quashed. Hence, in this view of the matter penalty under section 158BFA also shall not be leviable and appeal of assessee was allowed. Income-tax Act, 1961* Section 158BD Decision: In favour of Assessee. A.Y. 1-4-1996 to 20-12-2002 V.B. Giri v. Asstt CIT SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2009 TaxPub(DT) 2048 (Jod-Trib) : (2009) 126 TTJ 0217 : (2009) 030 DTR 0561

V.B. Giri v. Asstt CIT

INCOME TAX ACT, 1961

Search and seizure- Block assessment-Proceedings under section 158BD-Jurisdiction

Search under section 132(1) was conducted at the residence of one person. During the course of search, copy of two bank accounts assessee, storekeeper company were found and seized. Assessee had maintained accounts with two banks but deposits made in these accounts were not proportionate with the source of his income. In post-search inquiries, he admitted that the deposits in the said bank accounts belong to his friend whose whereabouts are not known. Inquiries were also made to trace the source of deposits as to whether same relate to sale proceeds of the company in which assessee was employed. But he denied that there was any nexus between the deposits and the sales of the company in which he was employed. Held:When considered the mandatory provisions as contained under section 158BD and as clarified by Honble apex court in the case of Manish Maheshwari v. Asstt CIT & Anr. (2007)289 ITR 341 (SC), it was explicitly cleared that before proceeding against any person other than the searched person under section 158BD, the law required that a satisfaction to the effect that the documents found as a result of search gave rise to undisclosed income of any other person other than the searched person, was required to be reached in the case of a person searched under section 132. In this case in, no such satisfaction was found reached or recorded in the case of searched person. Even a notice under section 158BC which is also a condition essential for proceeding against such person had also not been met out though condition of handing over of the seized documents could be deemed to have been satisfied as AO of both the persons was same. As the preconditions of invoking jurisdiction under section 158BD as laid down by the apex court in the case of Manish Maheshwari v. Asstt CIT & Anr. (supra), were not satisfied, the notice so issued under section 158BD on the strength of which assessment of undisclosed income of assessee had been made, was hereby quashed. Hence, in this view of the matter penalty under section 158BFA also shall not be leviable and appeal of assessee was allowed.

Income-tax Act, 1961 Section 158BD

Decision: In favour of Assessee.
A.Y. 1-4-1996 to 20-12-2002

V.B. Giri v. Asstt CIT